The CSP sector has always been commercially competitive. But in recent years, many firms have felt stronger pressure to compete through lower fees, bundled packages, and faster turnaround promises. Pricing pressure itself isn't unusual. What is worth reflecting on is the second-order effect it creates.
When fees drop too far, it changes not just profitability, but how the work gets done, what gets prioritised, and whether the firm can still stand behind its decisions when questions arise later.
The Case of PP v Zheng Jia
This is where the case of Public Prosecutor v Zheng Jia is worth paying attention to. Not because CSPs and directors are the same thing, but because the underlying risk pattern is familiar: a model where responsibility exists on paper, while diligence becomes increasingly thin in practice.
In this case, the High Court described an arrangement that enabled a "high volume, low effort enterprise", supported by what it called a "concerted dereliction" of reasonable diligence. That phrasing is not just legal language. It is a business model warning.
The real issue is not low profit. It is weak defensibility.
How Pricing Erodes Standards
Price competition usually starts from a simple idea: "If we reduce the price, we can win the client." But the long-term cost does not show up as lower profits only. It shows up as:
- Less time available per onboarding
- Less patience to resolve inconsistencies
- Less willingness to push back on clients who resist disclosure
- Weaker internal documentation because everything is rushed
- More reliance on assumptions rather than recorded justification
Over time, this creates a fragile operating environment — not because people want to cut corners, but because the business model leaves them with limited choices.
The Market Signal Matters More Than the Discount
Pricing goes beyond just a number. A low-fee package can unintentionally communicate: "We prioritise speed", "We don't ask too much", "We won't be difficult." That may attract price-sensitive legitimate clients. But it also shapes expectations across the market that scrutiny is optional, and that professional gatekeeping is negotiable.
Accountability Expectations Are Tightening
Under the Corporate and Accounting Laws (Amendment) Bill, the maximum fine for breach of directors' duties under section 157 of the Companies Act will increase from S$5,000 to S$20,000, with the option of imprisonment up to 12 months, with implementation targeted from April 2026 onwards. This signals what the system is moving toward: personal responsibility is being emphasised, and "reasonable diligence" is no longer treated as a minor issue.
What CSPs Can Do to Stay Sustainable
1. Set a defensibility floor
Define the minimum steps your firm needs to confidently stand behind an onboarding decision. If your pricing cannot sustain this floor, the issue is not staff performance — it is the business model.
2. Price by complexity, not by service label
Instead of one flat price for incorporation, adopt internal bands: straightforward, complex ownership, high-scrutiny cases. This ensures the work is funded properly without needing to sell "compliance" as a product.
3. Build a walk-away rule
A simple internal policy — "If we cannot justify it cleanly, we do not proceed" — prevents one weak onboarding from turning into years of exposure.
4. Compete on certainty, not cheapness
The strongest CSP value proposition is not low fees. It is clean execution, predictable processes, and fewer disruptions later. That is how you build a book that is sustainable and scalable.
The lesson from PP v Zheng Jia is not "don't take clients." It is that once the market normalises high-volume, low-effort models, the ecosystem becomes easier to exploit and harder to defend. The strongest CSPs won't win by being the cheapest. They'll win by being the most consistent, explainable, and defensible.
